Significant portions of eukaryotic genomes, including the Y chromosome, are heterochromatic, made up largely of repetitive sequences and possessing a distinctive chromatin structure associated with gene silencing. Heterochromatic regions have a high repeat content and are characterized by specific histone modifications, but the primary sequence elements that define specific chromosomal domains as preferred sites of heterochromatin assembly are not well understood. Recent studies suggest that small RNAs -- possibly derived from transposable elements (TEs) -- contribute to heterochromatin targeting. The recently formed neo-Y chromosomes of Drosophila albomicans and D. miranda are in the process of evolving altered chromatin structure: On the D. miranda neo-Y - which was formed about 1 MY ago - large segments have already acquired a heterochromatic appearance and TEs show a striking accumulation. About half of the neo-Y-loci have become non-functional, and most genes (<80%) are down-regulated from the neo-Y. This is supporting a link between heterochromatin formation and repetitive DNA, and its repressive effect on gene expression. The much younger D. albomicans neo-Y (<0.1 MY old) is mostly euchromatic, and most genes are functional on the neo-Y (<2% pseudogenes). However, almost 30% of neo-Y genes are down-regulated and in situ hybridization experiments reveal some early signs of accumulation of heterochromatin on the neo-Y of D. albomicans. D. miranda and D. albomicans therefore provide unique systems to study the mechanisms and evolution of heterochromatin formation in action using evolutionary approaches. Using a combination of comparative sequence analysis, gene expression studies, small RNA profiling and ChIP-seq experiments to map histone modifications associated with heterochromatin and genome interaction maps, we will address the following questions: What are the primary sequence elements used for targeting heterochromatin? Are small RNAs involved in heterochromatin targeting? What is the influence of heterochromatin formation on levels of gene expression? How far does heterochromatin spread in cis or in 3D? Is a high repeat content necessary for spreading of heterochromatin? Have chromatin boundary elements evolved on the neo-Y to limit spreading, and what is their molecular nature? Are histone modifications associated with active transcription counteracting the spread of heterochromatin? Can we identify other DNA sequence elements functioning as boundary elements on the neo-Y? Are certain categories of genes more likely to be heterochromatic? It will allow us to study the molecular basis of heterochromatin and how it evolves.